Interpipe sales rise 12% in 2018

Interpipe (INPIP), the largest Ukrainian producer of steel
pipes and railcar wheels, boosted its sales volume 12% yoy to 857 kt in 2018,
the company reported in a Feb. 12 press release.

Sales of pipe products increased 12% yoy to 668 kt in
2018 due to growth in American (37% yoy to 124 kt), European (24% yoy to 169
kt) and Ukrainian (22% yoy to 179 kt) markets, according to Interpipe. These
gains more than offset the loss of the CIS sales volumes (19% yoy to 113 kt).

Sales of railway products rose 10% yoy to 189 kt in 2018,
driven by the markets of Europe (76% yoy to 41 kt) and Ukraine (39% yoy to 62
kt), the company noted. Again, these gains more than compensated for the loss
of CIS sales volumes (17% yoy to 74 kt).

Recall on Jan. 19, 2018, the Eurasian Economic Union
(EAEU) – led by Russia and uniting five former Soviet countries (including
Belarus, Kazakhstan, Armenia and Kyrgyzstan) – hiked anti-dumping duties for Interpipe railcar wheels to
34.22% from 4.75%.

Dmytro Khoroshun: Following
the introduction of the EAEU duties, Interpipe was successful in 2018 in both
maintaining decent CIS railway product sales volumes and boosting sales in
Europe and Ukraine. The company noted that, having become a leader in the
European wheel market for freight railcars, it plans to enter the EU passenger
car wheel market and to continue selling wheels in Ukraine. Nevertheless, we
think that its CIS sales volumes will continue decreasing.

We also think that Interpipe’s pipe production
might drop about 7% in 2019 because of the expected lower oil prices.